Direct Marketing Association's Jerry Cerasale on the U.S. Postal Service's Explosive Proposed Rate Hike
And it's interesting to note that this $2.3 billion, when you project losing $7 billion [annually], is still about $5 billion short. So, it makes you wonder a little bit about that.
TM: What prompted the formation of the Affordable Mail Alliance?
JC: This rate case. It had its beginning with some of the big mailing associations getting together and talking about the fact that we expected the Postal Service to file for a rate increase that would break the Consumer Price Index cap and what should we do on that-whether it was an exigent case, did it meet the standards for [being] extraordinary or exceptional? Our belief was, and we've learned, that mailers speaking unitedly are stronger than if we all go off in our own different ways ...
It's really a unique event for me, with virtually the entire postal customer universe joined together saying this case is not good, this is a mistake.
TM: So small mailers are getting involved in protesting this rate case?
JC: Yes. Some of the small mailers actually may be the ones who may be harmed the most by these increases; their margins are close, they have very little reserves. And we've heard from not just DMA members, but members of other associations that this could be a death knell for their operations.
TM: Is there an unintended message being sent in this exigent rate case that marketers will always have to wonder whether they can trust the USPS?
JC: I think that's true. This really hurts the Postal Service's customers, and their customers are very angry with them—more so than at any time I've seen, as a collective group. And this is going to have negative implications for the customer relationship management the Postal Service wants.
One of the [compromises of postal reform] was the CPI cap. There was some prediction of rates, and this just blows that out of the water.